I was reading through some Reddit subs and found these interesting threads reg auto sales nationwide. Anyone care to speculate what this means for the upcoming holiday season and end of year period for automakers and dealers?
Also saw this comment on the same reddit sub.
manufacturers are looking to boost sales not leases, they will throw a ton more money at finance deals. Look at the dodge power dollars.
But I think there will be some interesting deals at the end of this year.
For the holiday season? I’m wondering what is means for the economy in general… 
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I was reading a few of these articles yesterday and thought they might be a taste of things to come for the holiday season. I’m just curious how all of this might affect things like the supply chain for GM (even though they stockpiled extra cars for the obvious reason of this shitstorm looming over the horizon), and sitting inventory on dealership lots (assuming buyer sentiment is down with regard to the economy as a whole, along with automotive purchases more specifically).
I actually know someone personally who is the used car sales manager for a GM/Chevy dealership. Their new car sales were way down last month, but the used sales were way up over that same time period. Thoughts?
In the short term? More rebates + incentives to get old units off of lots.
Long term? I’m going to say a recession (or a large economic downturn at a minimum).
Honda’s incentives in October are the same as they were in September.
Toyota has double digit declines and they’re October incentives are nonexistent. In fact, the lease deals this month are worse than they’ve been in years.
True. I think a few things are happening here.
So. I’m not sure how strongly all of these overlap or where the actual causality lies, but I would potentially think that there’s a bit of a calculated response to monthly sales numbers as a moving indicator of the markets. There must be a delay built in somewhere, and I’m almost more than certain that GM isn’t the only manufacturer which builds up a reserve inventory (83 days apparently) to try and stave off the adverse side effects of an unstable market whether it be labor or consumer generated.
Maybe they are just sitting on their hands for a minute to see where the cards fall this month and how the analysts react to the market metrics. That and potentially, you really need to make more money or try to break even when everything else seems to revolve around a shrinking market.
Maybe this is just the calm before the storm.
I also wonder if it’s just a perfect storm, with this in mind:
Sounds familiar for anyone who was around in 2008.
This trend - new car sales down, used car sales up, will ultimately be better for us leasers right?
If the cars we lease retain more of their value on the used market, providing the likes of Carvana/Vroom etc are able to stick around (which is questionable) then the chance of positive equity in your lease increases?
Can confirm this. Have a close friend in one of Toyota dealers in NJ and they set a used car sales record last month while not moving much of new metal…
If more people are projected to lease then more pre-owned vehicles will be available in three years. If more are available they will be predicted to be worth less because of having a larger supply. This will make the residuals less favorable. Also, dealerships are pushing more customers towards pre-owned and advertising pre-owned more. It is easier to make a profit on those than ten dealerships playing dealership deathmatch on a new vehicle.
It’s hard to see car markers holding the line on incentives if sales continue to contract. It takes time to recalibrate for a new sales status quo and until that happens you need to move the units produced.
I also think the US3 are in big trouble in a recession/credit crunch. They have grown fat and rich off people buying trucks and large SUVs while letting their car line up either away. If consumer confidence dips and credit becomes tighter, they are gonna struggle to move the $50k F150s, Rams and Sierra’s needed to stay profitable. Whereas Honda and Toyota for example, have plenty of cars and SUBs they can sell profitably for under 30k
*My hunch is the Escape is not really much of a profitable vehicle. Between fleet sales and huge rebates I don’t think it moves the profit needle for Ford.
I doubt delinquencies on cars will rise to a level like with subprime. People will pay their car before their mortgage.
I bet some of those people don’t have a mortgage. I’d bet most of them don’t.
fca is in trouble, gm is in trouble. Ford will not be in trouble, truck sales account for 1 in every 6 vehicles sold, ford sells/leases something like 850k new f series trucks a year and the majority will come from fleet sales and not 70k+ trucks, i.e 8 ft single cab xl or 6 ft double cable xl.
On top of that Lincoln is hot in the luxury segment, the navigators were the only suv that I have ever seen fly of the lot so fast they went at or above msrp for the first year and a half. Lincoln will eventually move to just 3/4 models that are all suvs.
Ford cut some dead weight in their cars and light suvs. But obviously any sort of depression/recession/economic bubble burst is gonna hit the car economy hard, however I don’t forsee a ford bailout like gm and Chrysler corp had, also fca looking for a trade partner badly to merge, Chrysler is in the sh*tter, fiat is eh, dodge doesn’t sell much these days, ram and jeep are keeping the above water but just barely.
No. This was observed clearly during 2008 recession.
They come to us, we don’t go to them. The narwhal 
at midnight my 
The recession is coming, it’s been a low-speed train wreck all year. If I recall there was a thread in the spring where we speculated whether US Auto sales peaked in 2018. In many (not all ways) they did.
GM doesn’t have a labor force to build any cars, so a drop in demand will help some of their “days of inventory”, except for the inevitable: the top sellers will run dry. After a few weeks the GM only/primary suppliers will slow/stop production. It won’t reach 2008 levels but we saw that entire system unwind in realtime, so we have a sense.
Honda plays a different game: this ain’t Burger King, you don’t get it your way. You want an Odyssey? You pay.
In many ways, cars for sales (units in-stock) is a lagging indicator. Most have production dates older than 60 days, some back 1-2 quarters. Some manufacturers (like Toyota) do a better job of adjusting production to match demand.
Truth. Unemployment is still 3.5% and people need to get to work. As long as they didn’t stretch and get a 96 month loan for their commuter car, there should not be a big uptick in delinquency.
We’re had a lot of cheap credit for a long time, and it’s ability to change behaviors and accelerate the upgrade/replacement cycle is being tempered by other volatility. Many manufacturers have cut unpopular models that seemed to be jobs programs ahead of a dip in demand.
GM will get through this strike. Hopefully the major autos have adjusted their production plans for Q4 based on demand changes and changes in behavior (selling more new than used, longer loans on new).
Edit: if there is one US financial news story to follow right now, it’s this: New York Fed extends market intervention into November
